AGA reports $53.9bn in annual illegal and unregulated revenue for US gaming market

The American Gaming Association (AGA) has introduced a new report regarding illegal gambling activity across the US gaming market, as prohibited offerings were found to be driving $53.9bn in annual revenue and costing states $15.3bn in yearly gaming tax revenue loss. 

“Driven by a sharp rise in illegal iGaming, expanding use of unregulated skill machines, and persistent illegal sports betting, the illegal market has grown 22% since AGA’s last report in 2022,” the AGA said as part of its analysis. 

“Growth in the legal market in recent years has kept the illegal market’s share of total U.S. gaming revenue largely steady – with illegal operators capturing smaller shares of sports betting and iGaming revenue – but illegal operators still account for nearly one-third (31.9%) of the total US gaming market.”

Illegal sports betting, including bookies and offshore, produces an annual handle of $84bn, resulting in $5bn of revenue each year as well as $1bn in yearly tax revenue loss. Prohibited online slots and table games were found to generate $466.2bn in yearly handle, equating to $18.6bn in annual revenue for illegal operators according to the AGA. 

“Illegal gambling operators are thriving at the expense of American consumers, siphoning billions in tax revenue from state governments and undercutting the efforts of the legal market,” AGA President and CEO Bill Miller said. 

“It’s time for a national crackdown on the pervasive illegal market that is draining state coffers and putting people at risk.”

Good to know: The AGA released new research on sweepstakes casinos as part of its campaign against the form of gaming on July 31, 2025

Unregulated machines in bars or taverns reportedly cost states $9.5bn in gaming tax revenue loss each year, driving $123.4bn of handle annually while taking home $30.3bn in revenue. According to the study, there are currently over 625,000 unregulated machines located throughout the US, a 7.7% increase since 2022. 

The AGA also reported just 24% of iGaming players are using legal services, falling from the 52% found in 2022. The share currently using both illegal and regulated sites rose to 49%, but illegal operators witnessed a decrease in total market share since 2022 as well. 

In favorable news for regulators, the share of sports bettors exclusively using illegal services fell by approximately 33%, while illegal sportsbooks’ share of the total US sports betting market fell from 36% to 24%.

“These bad actors operate in the shadows with zero consumer protections, no responsible gaming obligations and no economic return to the communities they exploit,” Miller said. 

“Combating them requires not only stronger US enforcement, but also continuing to work closely with our international partners to shut down offshore operators and hold them accountable.”

The study was reportedly based largely on a survey of 2,454 US adults, analyzing their illegal and regulated betting activity over the past-year as well as observations on unregulated gaming machines. 

Kirk Geller

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